1. Performance Review Body designated by the European Commission SES Performance Scheme: Driving Performance Improvement in European ATM /ANS CIPFA Meeting Peter Grififths PRB Chairman 15/10/2014

2. Performance Review Body2 Content of the presentation The Performance Scheme (PS) The Performance Review Body (PRB) The Theory ANS in aviation context Performance Plans US- EU OPS Comparison Future performance improvements Human Factor Conclusions

3. Performance Review Body3 The Performance Scheme (PS) One of the key pillars of the SES by setting EU-Wide and Local targets, performance monitoring and corrective actions. The PS is organised around fixed Reference Periods (RP). RP1 runs 2012-2014, RP2 runs 2015-2019. Targets set are legally binding for EU Member States. The Performance Regulation principles: –4 Key Performance Areas (KPAs): Safety, Capacity, Environment, Cost Efficiency. –Incentives/cost efficiency linked with Charging Sch. –Staff representation consultation.

4. Performance Review Body4 The Performance Review Body (PRB) The PRB Reports to the EC in accordance with provisions of 390/2013 (the Performance Regulation). The purpose of the PRB is to assist the EC in PS implementation and NSAs on request. Competence, impartiality and independency. Main key tasks are: –Advise EC in setting EU-wide performance targets. –Asses National/FAB Performance Plans (and the NM). –Monitor the performance of the system in the 4 KPAs.

5. Performance Review Body5 ANS in aviation context Orders of magnitude of turnover 6%6-12% 6% Orders of magnitude for illustrative purposes SafetyPunctuality Financial Environment

6. Performance Review Body6 Basic Adams Model of Risk For further reading the reference text is: Risk John Adams UCL London 1995 ISBN 1-85728-067-9 HB and 1-85728-068-7 PB Management Process Management Process Opportunity Balancing Decisions Balancing Decisions Reward Unwanted Event’s Risks

7. Performance Review Body7 We make decisions on opportunities and risks based on perceptions from our culture. These perceptions apply filters to our model.

8. Performance Review Body8 The operating loops provide mechanisms which provide systemic management of our companies. The two loops must balance within a risk tolerance boundary.

9. Performance Review Body9 The two loops must balance within a risk tolerance envelope. Corporate reporting systems ensure we remain within the risk tolerance boundaries.

10. Performance Review Body10

11. Performance Review Body11 At the same time others are making similar decisions all of which impact on others and you. Thus constant review is necessary to ensure that the original decisions are still correct.

12. Performance Review Body12 For further reading the reference text is: Reasons Accident Causation Model, Prof Jim Reason, University of Manchester email: reason@psy.man.ac.uk. Reasons causation (Swiss Cheese) model suggests when these events line up unwanted events occur. Along with the Adams model we can see how this would happen. His investigation into accidents holds true for other company internal or external situations.

13. Performance Review Body13 ANS in Aviation context  All KPAs but Safety expressed in economic terms  SES targets address all 3 KPAs (en-route) and Safety  Estimated TEC ≈ €10.5 B (SES area, 2012)  ANS-related Airborne equipment to be added  TEC fully borne by users of European airspace  Performance improvements, more accurate data, different area (SES): lower TEC estimates  ATFM delay and flight-efficiency cost estimates must not be interpreted as ANS inefficiency  Trade-offs between KPAs  Optimum is not 0: Minimise TEC within acceptable bounds of safety and security 2.2 B 0.8 B 2.0 B 3.5 B 0.8 B Total User cost (ground) € 10.5 B Flight-efficiency En-route: 1.0 B TMA, taxi: 1.2 B ATFM Delays ER: 0.5, Apt: 0.3 ATCO Other costs ECTL, MET, NSA User Charges €7.5 B Estimated TEC 2012 (SES) Support costs Other staff Other operating CAPEX Depreciation Cost of capital 1.2 B Airborne ANS

14. Performance Review Body14 Performance Plans Monitoring SES targets for all 4 KPAs in RP2 (En-route) Performance also monitored in TMA

15. Performance Review Body15 Performance Plans  Reactive policy in the 90’s: delays going up while costs going down, and vice-versa  Balanced performance-oriented approach; both delays and unit costs down since 2000  Enforceable SES targets apply from 2012 onwards  Fast traffic growth until 2008: challenge for capacity, but helps cost-efficiency  Traffic growth much lower now, even negative: Easier for capacity, harder for cost-efficiency

16. Performance Review Body16 Performance plans  Challenging SES targets for 2012-2013 were met and even exceeded  Best level ever achieved in ATFM delays!  Challenging target for 2014 and beyond (0.5 min/flight), close to optimum SES States

17. Performance Review Body17 Performance Plans Excellent routing efficiency of ANS, certainly best of all transport modes (~ 3%) –Yet significant economic impact (fuel burn, flight time) –Impossible to reach 0% with full civil-military traffic load Improvement in KEA compensates traffic growth (-21% from 2011 to 2019) Carbon-neutral growth of aviation (IATA goal due in 2020) already being met by ANS! Network Manager’s flight-efficiency initiative, aimed at reaching SES targets –Role of airlines in closing gap between FPL and actual route (predictability) Further environmental indicators needed (Vertical, CO 2 efficiency…) –Would require inputs on optimum flight from AOC Great Circle broken up using Achieved distance SES area KEP (FPL) and KEA (actual) vs great circle

18. Performance Review Body18 Performance Plans Higher DUC starting point (€58.1) than DUR arising from aggregated RP1 plans (€54.9) in 2014, mainly due to traffic being significantly lower than planned.  Significant improvement under binding SES cost-efficiency targets  Spain played a large role in improvements from 2009 to 2012

19. Performance Review Body19 Performance plans Major savings from RP1-2 targets: Some € 7.6B vs. 2012 baseline over RP2 ~ 7.6B

20. Performance Review Body20 US-EU OPS comparison

21. Performance Review Body21 US-EU OPS comparison

22. Performance Review Body22 US-EU OPS comparison European unit costs decreased -13% over 2002-2011 But still some 50% above US in absolute terms (US 34% below Europe)

23. Performance Review Body23 Flight-hours controlled ATM/CNS provision costs Unit ATM/CNS provision costs - 34% in US EUROCONTROL/PRU ATCOs in OPS working hours ATCO-hour productivity +55% in US ATCOs in OPS Employment costs ATCOs employment Cost / flight-hour - 48% in US ATCO in OPS cost / ATCO-hour -25% in US €85 €163 €354 €511 Support costs per flight-hour - 25% in US Support costs €269 €348 + US-EU OPS comparison Flexibility is key to ATCO productivity Support costs: high share, mostly fixed, opportunity for rationalisation, must be addressed!

24. Performance Review Body24 Future performance improvements  Efficiency gains in individual ANSPs  Airspace improvements (e.g. free routes)  More flexible management of capacity to match demand (ATCO contracts)  New Technology  PCP investment mostly on ground, can fit within current CAPEX Main impact expected in TMA, airport traffic  Future deployment must have clear positive CBA, including Airborne ANS part of TEC  Efficient SESAR deployment, e.g. joint procurement, maintenance  Rationalisation of service provision and oversight, including restructuring  Very significant further performance improvements achievable in true Single Sky

25. Performance Review Body25 Human Factor (Cultural Filters) One of SES 5 pillars Staff consultation principle in PR Key to any system drive to change ATCO active involvement key to PS success: –Consultation process –Participation in safety improvement –Introduction of new technology –Process optimisation

26. Performance Review Body26 Capacity (1/6) – Jan.-Sep. JAN-SEP – not on track to meet the annual target!

27. Performance Review Body27 Environment – Jan.-Sep. KPI shows notable improvement in 2014

28. Performance Review Body28 Cost-Efficiency – SU’s Jan-AUG +4.2% actual 2014 vs. 2013 -4,7% actual 2014 vs. PP 5 States below -10% 3 States above +10% +4.2% actual 2014 vs. 2013 -4,7% actual 2014 vs. PP 5 States below -10% 3 States above +10%

29. Performance Review Body29 Conclusions Significant progress in European ANS performance Best ever ATFM delays achieved in 2013 Flight-efficiency target leads to carbon-neutrality of aviation for ANS Unit costs going down significantly But margins exist for significant further improvements European unit costs still nearly 50% above US’s SES targets for RP1-RP2 bring very significant further improvements Balance between KPAs is essential Human factor Staff is the main asset to drive the change Win-win opportunity Change management is key to PS success